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At least 27 dead in Mali hotel terror attack, hostage situation now over

At least 27 people have been reported dead after Malian commandos stormed a luxury hotel in the capital Bamako with at least 170 people inside, many of them foreigners, that had been seized by Islamist gunmen.

The former French colony has been battling Islamist rebels for several years, and the jihadist group Al Mourabitoun, allied to al-Qaeda and based in the deserts of northern Mali, claimed responsibility for the attack in a tweet.

By late afternoon on Friday, ministerial adviser Amadou Sangho told the French television station BFMTV that no more hostages were being held.

Security forces set up a perimeter around the hotel. (9NEWS)Authorities evacuate two women from the area near the Radisson Blu Hotel. (AFP)

But a UN official said UN peacekeepers on the scene had seen 27 bodies in a preliminary count, and that a search of hotel was continuing.

It was not clear whether any of the gunmen, who were said to have dug in on the seventh floor of the hotel as special forces advanced on them, were still active but it is believed they may still be inside the hotel.

State television showed footage of troops in camouflage fatigues wielding AK47s in the lobby of the Radisson Blu, one of Bamako's smartest hotels and beloved of foreigners. In the background, a body lay under a brown blanket at the bottom of a flight of stairs.

The peacekeepers saw 12 dead bodies in the basement of the hotel and another 15 on the second floor, the UN official told Reuters on condition of anonymity.

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He added that the UN troops were still helping Malian authorities search the hotel.

A man working for a Belgian regional parliament was among the dead, the assembly said.

Minister of Internal Security Colonel Salif Traor said the gunmen had burst through a security barrier at 7am local time, spraying the area with gunfire and shouting "Allahu Akbar", or "God is great" in Arabic.

Occasional bursts of gunfire were heard as the assailants went through the seven-storey building, room-by-room and floor-by-floor, one senior security source and a witness told Reuters.

Some people were freed by the attackers after showing they could recite verses from the Koran, while others were brought out by security forces or managed to escape under their own steam.

One of the rescued hostages, celebrated Guinean singer Skouba 'Bambino' Diabate, said he had overheard two of the assailants speaking in English as they searched the room next to his.

"We heard shots coming from the reception area. I didn't dare go out of my room because it felt like this wasn't just simple pistols - these were shots from military weapons," Diabate told Reuters by phone.

"The attackers went into the room next to mine. I stayed still, hidden under the bed, not making a noise," he said. "I heard them say in English 'Did you load it?', 'Let's go'."

The raid on the hotel, which lies just west of the city centre near government ministries and diplomatic offices, came a week after Islamic State militants killed 129 people in Paris, raising fears that French nationals were being specifically targeted.

Twelve Air France flight crew were in the building but all were extracted safely, the French national carrier said.

A Turkish official said five of seven Turkish Airlines staff had also managed to flee. The Chinese state news agency Xinhua said three of 10 Chinese tourists caught inside had been rescued.

The Radisson attack follows a siege in August lasting almost 24 hours at a hotel in the central town of Sevare in which five UN workers were killed, along with four soldiers and four attackers.

The Radisson Blu Hotel in Mali. (Radisson file image)

Five people, including a French citizen and a Belgian, were also killed in an attack at a restaurant in Bamako in March, in the first such incident in the capital.

Islamist groups have continued to wage attacks in Mali despite a June peace deal between former Tuareg rebels in the country's north and rival pro-government armed groups.

In a recording authenticated by Malian authorities this week, a jihadist leader in Mali denounced the peace deal and called for further attacks against France, which is helping national forces fight extremists.

In Europe, the 28-member EU bloc has agreed to immediately tighten checks on all travellers, including European nationals, at the external borders of the passport-free Schengen area following the Paris attacks.

French Interior Minister Bernard Cazeneuve said the EU will consider ways to change the Schengen system by the end of year to allow "systematic" controls of EU citizens at the zone's external borders.

The European Commission also called for the establishment of an EU-wide intelligence agency after the Paris massacre, the deadliest on European soil since the Madrid train attacks that killed about 200 people in 2004.

The Schengen zone -- which allows Europeans to travel without border controls -- has come under scrutiny following revelations that some of the Paris attackers came from Belgium and that suspected ringleader Abdelhamid Abaaoud appears to have returned from fighting with ISIL in Syria to orchestrate the attacks.

Prosecutors also revealed that Abaaoud was caught on CCTV at a Paris Metro station less than an hour after gunmen began spraying cafes and restaurants with gunfire in the trendy Canal St Martin area.

Prime Minister Manuel Valls admitted Thursday that French authorities did not know how he had managed to get into the country, when he was under an international arrest warrant.

Abaaoud's links to Syria and the discovery of a Syrian passport near the dead body of one of the gunmen have also stoked concerns that jihadists could be posing as refugees as a cover for plotting attacks.

Abaaoud himself was the subject of an arrest warrant issued by Belgium, where in July he was sentenced in absentia to 20 years in prison for recruiting jihadists for Syria.

He was involved in four attack plots foiled in France this year, Cazeneuve has said.